The following summarizes the project. These answers will come in handy when completing the essay question where you summarize all of your work. This is a chance for you to step back and see how all the pieces of the project fit together.
Go back into your answers and be sure they are correct and then fill them below.
What were the balances of the following accounts at the age of retirement?
A) 401K = 700061.57$
B) Roth = 191578.44$
C) Mutual Funds = 199015.51$
D) Vanguard Options = $45344.04
E) TOTAL of all retirement funds = $1135999.55
What monthly income can your client expect at their age of retirement?
F) Income before adjusting for inflation = $6116.96
G) Income after adjusting for inflation = $3422.63
What total retirement balance should your client have to meet their income requirement AND how short are they? (Neither of these is the monthly contribution needed to make up that shortage.)
H) Total needed = $1360823.31
I) Total shortage = $224823.76
What is the monthly additional contribution your client should make in order to have the total they need at retirement which will meet their monthly income goals.
J) Per month, they should add $140.97
Calculate this for me
What will happen to the client’s monthly income (in real dollars) if the inflation rate goes up by 1%? What if it goes down by 1%?
K) If inflation goes up by 1%, monthly real income will be $??
L) If inflation goes down by 1%, monthly real income will be $??
What will happen to the client’s monthly income (in real dollars) if the rate of return they earn while working goes up by 1%? What if it goes down by 1%?
M) If the rate of return goes up by 1%, monthly real income will be $ ??
N) If the rate of return goes down by 1%, monthly real income will be $???
ESSAY QUESTION:
Your manager has asked you for a brief (no more than 300 words) summary of your analysis of your client’s retirement plan based on the information you were given in your project. Your summary should have these three parts:
1) Overview: She wants to know the basic and most important results of your analysis and what you will recommend to your client. Use the results you found to write her a business email addressing her request. As you write, you will need to keep in mind that she may not remember the financial formulas you are familiar with, so you will want to avoid using those formulas. You should include at least all of the following:
A quick summary of who your client is and what their retirement goals are.
Your client’s final investment total at the age of retirement (including all four accounts).
The amount of monthly income they can expect in retirement, including the amount after it’s adjusted for inflation.
The amount of additional monthly contribution needed to meet their retirement income goal.
2) What If Graph: Next, include ONE graph screenshot from your WHAT IF calculations and clearly explain what it means to your manager. The graph should have a proper title, the axes should be labeled, the domain and range should be reasonable, and all other elements should be clear and correct. Only include a screenshot of the relevant information. Do not attach an entire spreadsheet file, and do not upload a screenshot of your entire desktop. If you want to include both a table and a graph, that is OK, but only include the table that is related to your graph. You must create your graph with technology to receive credit.
3) Recommendation: Your client has asked you to examine what minimum rate of interest they should try to earn to have at least $2909 of monthly income (adjusted for inflation) at the time of retirement. Use results from a relevant What-If analysis to find the rate of return needed. ➡️ You do not need to do any additional calculations besides those you have already done in your What If table. ALSO, after you do some basic research online, give your client a specific, real-life recommendation on how to potentially get that new rate of return.
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